Textron quarterly up on business jets, helicopters

ChristopherHinton

NEW YORK (MarketWatch) -- Textron Inc. said Thursday its fourth-quarter profit soared 32% as the demand for Cessna business jets and Bell helicopters continues to drive the aerospace company's bottom line.

However, the Providence, R.I.-based company also gave a softer-than-anticipated 2008 earnings outlook, in part due to costs associated with its development of a large-cabin Cessna Citation jet.

For 2008, Textron
TXT, +1.65%
expects earnings from continuing operations between $3.75 and $3.95 a share, which is lower than analyst estimates of $4.04 a share.

"While we expect softening and maybe even a temporary downturn in the U.S. economy in 2008, we believe we are particularly well positioned, given our strong aircraft and military backlogs and history of prudent underwriting at Textron Financial," Chief Lewis Campbell said in a statement.

"Even with the softer U.S. economy, we expect another banner year of business jet orders exceeding current year deliveries," Campbell said. "Given that our jet backlog already extends well into 2009, this bodes well for continued, uninterrupted growth well into the next decade at Textron."

Citi analyst Jeffrey Sprague said the 2008 forecast looks conservative, considering the company expects uninterrupted earnings growth through the end of the decade.

Textron shares closed down 6.2% at $51.26. The stock has lost about a quarter of its value year to date.

For the recent quarter, Textron said it earned $256 million, or $1 a share, up from $195 million, or 76 cents a share in the year-ago period. Revenue rose 18% to $3.76 billion.

From continuing operations, the company said it earned $1 a share, topping the average of a Thomson Financial survey of analyst estimates of 92 cents a share.

Combined backlog at Bell Helicopter, Textron Systems and Cessna stood at $18.8 billion and the end of 2007, up from $12.9 billion at the end of last year.

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